The purpose of the DBAs is to reduce the double taxation of income in one jurisdiction that is that of a resident of another resident. The main objective of the agreement is to create a framework to facilitate the greater trade flows between Singapore and Myanmar and thereby strengthen bilateral economic relations in the interests of both countries. Tax treaties allow them to access double taxation exemptions, either through tax credits, tax exemptions or reduced withholding tax rates. These facilities vary from country to country and depend on different income items. Learn more about Singapore`s double taxation conventions. An overview of the comprehensive bilateral tax treaty between Singapore and India to avoid double taxation of income. Find out more here. Double taxation relief methods are given either under a country`s national tax law or under the tax treaty. In Singapore, the following methods are available: the same income is taxed twice. The DBA imposes this double taxation by allowing the Singapore company to charge a tax credit of foreign tax on the same income. The development of international trade and multinationals has increased the need to address the issue of double taxation. As a company or individual looking for business opportunities and investments beyond your own country, you would of course deal with the problem of taxation, especially if you will have to pay twice taxes on the same income in the host country and in your country of origin. As a result, you are trying to structure your operations to optimize your tax position and reduce costs that, in turn, would increase your global competitiveness.
It is the relevance of the DBA or Singapore`s tax treaties that comes into play. If your business contracts foreign income from a contractor, you can benefit from DBA benefits that allow a company to not pay taxes in the foreign jurisdiction or pay taxes at a reduced rate. The provisions of the treaty are generally reciprocal (applicable to the two contracting countries) and non-discriminatory, i.e.: You would not be in a worse tax situation than if you were a taxpayer in the country of taxation. If there is no contract between your country and Singapore, you can still benefit from Singapore`s unilateral tax credits. Taxpayers of our contractors can also benefit from the benefits of the DBA if they receive income from Singapore. To qualify for this benefit, they must prove that they are tax domiciled by submitting the IRAS, a certificate of residence filled out by non-residents (request for exemption from income tax in Singapore as part of the prevention of double taxation agreements), duly certified by the tax administration of their country of residence. Find out here everything you need to know about Singapore – Indonesia Double Tax Treaty online, as well as information about their online economic relationships. Under a DBA, a tax credit is generally only available in the country of residence if the income has been taxed in the country of origin. Tax savings credits are a particular form of credit by which the country of residence agrees to grant tax that would have been paid in the country of origin, but which has not been “spared” by the country`s specific laws to promote economic development.